Ensuring customer satisfaction and maintaining long‐term relationships with customers have become essential for survival among competitive service industries. The present study addresses this need by proposing a conceptually integrated four‐phase model that incorporates elements of customer relationship management (CRM) and customer satisfaction (represented by the extended American Customer Satisfaction Index model). Then, this study formulates structural equation modeling to test various research hypotheses related to the effect of the CRM initiative. An empirical study of 143 leading Taiwanese service firms distributed among seven service industries was conducted. The implementation levels of various constructs, input (customer knowledge), service provision (customer interactions), output quality, perceived quality, perceived value, perception of customer satisfaction, customer loyalty, purchasing intention, and profits of CRM are assessed in a range of service industries by means of a questionnaire survey and in‐depth interviews. The results of the empirical study reveal statistically significant influences among various constructs of the CRM integrated model. These results also represent a useful reference for managers of service organizations that could be used to improve the profitability and implementation level of CRM. The present study represents an important investigation in the development of an integrated CRM implementation system for service industries. © 2012 Wiley Periodicals, Inc.